ACKNOWLEDGEMENT

An endeavor to transform itself into success needs efforts. These efforts are individual, standing in isolation. Such individual efforts require three things for their further development. These three things being – “Reason, Rationality and Self-Esteem”. The combination of these three basic traits delivers Productivity. However, time and again this productivity requires encouragement and guidance. This much requisite support comes in the form of individuals furthering the development of individuals. Professionals furthering the development of Amateurs. This acknowledgement is an effort to recognize these professionals who have made this project a combination of the three fundamental traits.

This project report and the learning process behind it would not have been possible without the guidance of My Faculty Guide, Professor H.S. Pande he was able to impart me with the right approach that my training required for its successful practical implementation.

These past three months were of utmost importance as they added value towards my path of knowledge. I would like to end this acknowledgement by thanking the customers, clients, investors, and people at large with whom I have interacted during the course of my training.

I am grateful for each and every valuable interaction that brought me to a better understanding of the workings of the Banking industry and of the intricacies of Investment in India, both forming the crux of my report.

\ TABLE OF CONTENTS

Abstract

Introduction of Banking

Company Profile (Kotak Mahindra Bank)

Mutual Fund- Introduction- Mutual Fund Industry in Jaipur- Mutual Fund Industry in India- Mutual Fund Analysis

Retail Banking- Introduction- Product profile- Comparative Analysis of Saving Accounts

Insurance - Introduction- History- Product Profile- Comparative analysis of Different Schemes

Conclusion

References

ABSTRACT

The investment banking is not a new subject in the field of finance. It started in the fifteenth century in Italy and later on spread to France and the UK in the eighteenth century. The name Merchant Banking originates from the fact that it was started by merchants who added banking activities to their operations, and through innovations, came up with what is the real merchant bankers were to remit foreign currencies from one place to the other.

In UK, merchant bankers started with bill discounting for their customers, even though they were more of merchants than of bankers. Barings brothers was the oldest merchant banker in the UK while in the US indigenous merchant bankers started operating by 1880 and started helping the conversion of privately held companies into public companies.When the great crash took place in 1929, most merchant bankers were left with heavy losses and with the introduction of the Glass-Steagall Banking Act in 1933, the government separated merchant banking from commercial banking. Further, the Securities Act, 1934 prohibited depositories from underwriting and tried to correct the malpractices in securities trading.

The Glass-Steagall Act restricts even investment bankers from owning a firm dealing in securities and from underwriting. Owing to the legal challenge created by the investment bankers in America, the government in 1987 has allowed banks to float subsidiaries to undertake the merchant banking and investment-banking activity of the bank, where by the total income from these subsidiaries can be up to 25% of the total income of the bank.

The KOTAK MAHINDRA BANK Ltd. has started its operations 20 years ago as an integral part of Kotak Mahindra Group and is one of the India’s leading financial institutions today enjoying the trust and confidence of over 5 lakh customers across the country. The main functions of Kotak Mahindra Bank Ltd. are: they offer a comprehensive range of financial services and are market leaders in Retail Equities, Car Finance, Life insurance and Investment Banking and as a financial institution they provide world class financial solutions for Indians the world over. INTRODUCTION

The essential function of a bank is to provide services related to the storing of value and the extending credit. The evolution of banking dates back to the earliest writing, and continues in the present where a bank is a financial institution that provides banking and other financial services. Currently the term bank is generally understood an institution that holds a banking license. Banking licenses are granted by financial supervision authorities and provide rights to conduct the most fundamental banking services such as accepting deposits and making loans. There are also financial institutions that provide certain banking services without meeting the legal definition of a bank, a so-called non-bank. Banks are a subset of the financial services industry. The word bank is derived from the Italian banca, which is derived from German and means bench. The terms bankrupt and "broke" are similarly derived from banca rotta, which refers to an out of business bank, having its bench physically broken. Moneylenders in Northern Italy originally did business in open areas, or big open rooms, with each lender working from his own bench or table. Typically, a bank generates profits from transaction fees on financial services or the interest spread on resources it holds in trust for clients while paying them interest on the asset. Services typically offered by banksAlthough the type of services offered by a bank depends upon the type of bank and the country, services provided usually include:

Directly take deposits from the general public and issue checking

and savings accounts

Lend out money to companies and individuals (see moneylender)

Cash checks.

Facilitate money transactions such as wire transfers and cashiers

checks

Issue credit cards, ATM, and debit cards.

Online banking.

Storage of valuables, particularly in a safe deposit box.

Investment solutions safe and profitable investment options

Types of banks There are several different types of banks including:

Central banks usually control monetary policy and may be the

lender of last resort in the event of a crisis. They are often charged

with controlling the money supply, including printing paper money.

An example of central bank is the Reserve Bank Of India.

Investment banks underwrite stock and bond issues and advise on

mergers. Examples of investment banks are Goldman Sachs of the

(USA) or Kotak Mahindra Bank Ltd (India).

Merchant banks were traditionally banks, which engaged in trade

financing. The modern definition, however, refers to banks, which

provides capital to firms in the form of shares rather than loans.

Unlike Venture capital firms, they tend not to invest in new

companies.

Private banks manage the assets of the very rich.

Savings banks write mortgages exclusively.

Offshore banks are banks located in jurisdictions with low taxation

and regulation, such as Switzerland or the Channel Islands. Many

offshore banks are essentially private banks.

Commercial banks primarily lend to businesses (corporate banking)

Retail banks primarily lend to individuals.

Universal banks engage in several of these activities. For example,

Citigroup, a large American bank, is involved in commercial and

retail lending; it owns a merchant bank (Citicorp Merchant Bank

Limited) and an investment bank (Salomon Smith Barney); it

operates a private bank (Citigroup Private Bank).

COMPANY PROFILE

KOTAK MAHINDRA GROUP Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporates. The group has a net worth of around Rs.1,700 crore and employs over 4,000 employees in its various businesses. With a presence in 74 cities in India and offices in New York, London, Dubai and Mauritius, it services a customer base of over 5,00,000. Kotak Mahindra has international partnerships with Goldman Sachs (one of the world's largest investment banks and brokerage firms), Ford Credit (one of the world's largest dedicated automobile financiers) and Old Mutual (a large insurance, banking and asset management conglomerate).

KEY GROUP COMPANIES AND THEIR BUSINESSES

Kotak Mahindra Bank The Kotak Mahindra Group’s flagship company, Kotak Mahindra Finance Ltd that was established in 1985, was converted into a bank - Kotak Mahindra Bank Ltd in March 2003 becoming the first Indian company to convert into a Bank. It’s banking operations offers a central platform for customer relationships across the group’s various businesses. The bank has a presence in the Commercial Vehicles, Retail Finance, Corporate Banking and Treasury and has recently entered the Housing Finance segment.

Kotak Mahindra Capital Company Kotak Mahindra Capital Company Limited (KMCC), India's premier Investment Bank and a Primary Dealer (PD) approved by the RBI, is a strategic joint venture between Kotak Mahindra Bank Limited and the Goldman Sachs Group, LLP. KMCC's core business areas include Equity Issuances, Mergers & Acquisitions, Structured Finance and Advisory Services, Fixed Income Securities and Principal Business.

Kotak Securities Kotak Securities Ltd., a strategic joint venture between Kotak Mahindra Bank Limited and the Goldman Sachs Group, LLP., is one of India's largest brokerage and securities distribution house in India. Over the years Kotak Securities has been one of the leading investment broking houses catering to the needs of both institutional and retails investor categories with presence all over the country through franchisees and coordinators. Kotak Street - the retail arm of Kotak Securities Ltd., offers

online and offline services well-researched expertise and financial products to the retail investors.

Kotak Mahindra Primus Kotak Mahindra Primus Limited (KMP) is a joint venture between Kotak Mahindra Bank Ltd and Ford Credit International Inc., (USA) formed to finance all non-Ford passenger vehicles. KMP is one of the country’s leading players in car finance and is focused to financing and supporting automotive and automotive related manufacturers, dealers and retail customers.

Kotak Mahindra Asset Management Company Kotak Mahindra Asset Management Company (KMAMC), a subsidiary of Kotak Mahindra Bank, is the asset manager for Kotak Mahindra Mutual Fund (KMMF). KMMF manages funds in excess of Rs 4000 crores and offers schemes catering to investors with varying risk- return profiles..

Kotak Mahindra Old Mutual Life Insurance Limited Kotak Mahindra Old Mutual Life Insurance Limited is a joint venture between Kotak Mahindra Bank Ltd. and Old Mutual plc. Kotak Life Insurance helps customers to take important financial decisions at every stage in life by offering them a wide range of innovative life insurance products, to make them financially independent.

Creating banking history Established in 1984, The Kotak Mahindra group has long been one of India's most reputed financial organizations. In February 2003, Kotak Mahindra Finance Ltd, the group's flagship company was given the license to carry on banking business by the Reserve Bank of India (RBI). This approval creates banking history since Kotak Mahindra Finance Ltd. is the first company in India to convert to a bank.

The complete bankAt Kotak Mahindra Bank, we address the entire spectrum of financial needs for individuals and corporates. From Retail Finance to Equities, Mutual Funds to Life Insurance and Investment Banking, we have the products, the experience, the infrastructure and most importantly the commitment to deliver pragmatic, end-to-end solutions that really work.

RETAIL BANKING

The essential function of a bank is to provide services related to the storing of value and the extending credit. The evolution of banking dates back to the earliest writing, and continues in the present where a bank is a financial institution that provides banking and other financial services

Services typically offered by banks:

Although the type of services offered by a bank depends upon the type of bank and the country, services provided usually include:

Directly take deposits from the general public and issue checking and savings accounts

Lend out money to companies and individuals (see moneylender)

Cash checks.

Facilitate money transactions such as wire transfers and cashiers checks

Issue credit cards, ATM, and debit cards.

Online banking.Storage of valuables, particularly in a safe deposit box

The Product Profile-An Overview

No matter what ones banking needs are, Kotak Mahindra Bank has an offer that's just right for him\her. Kotak savings accounts offer the customers attractive returns with personalized banking services. It has a variety of products to offer, Kotak Edge Savings Account, Kotak Pro Savings Account and Kotak Ace Savings Account. Each product is feature packed ranging from Free Home Banking, Free Access to 6000+ ATMs, Free DDs, and Free At -Par Cheque Facility to Free Trading Account & Free Demat Account. They can choose the one that suits them the most and meet their requirements

PRODUCTS

1. Kotak Edge Saving Account2. Kotak Pro Saving Account3. Kotak Ace Saving Account

SAVING ACCOUNTS

FEATURES EDGE PRO ACE

MIN AQB 10,000 20,000 75,000

2 WAY SWEEP

MULTIPLES OF 10K

MULTIPLES OF 20K

MULTIPLES OF 75K

HOME BANKING

NO YES/FREE YES/FREE

DEMAND DRAFT

CHARGED FREE UPTO 500K FREE UPTO 500K

ECS YES YES YES

DEBIT CARD KOTAK/UTI GLOBAL GLOBAL

PHANE BANKING

YES YES YES

NET BANKING

YES YES YES

MOBILE BANKING

YES YES YES

TRADING A/C

YES YES YES

DEMAT A/CYES YES YES

COMPARITIVE ANALYSIS OF SAVING ACCOUNTS

FEATURES/BANK

KOTAK ICICI HSBC HDFC STAN.C UTI

MIN AQB 20,000 5,000 25,000 5,000 50,000 5,000

2 WAY SWEEP

YES YES YES NO YES NO

HOME BANKING

YES NO YES NO YES NO

DEMAND DRAFT

FREE CHARGED

FREE CHARGED

FREE FREE

ECS YES YES YES YES YES YES

DEBIT CARD

PHANE BANKING

YES YES YES YES YES YES

NET BANKING

YES YES YES YES YES YES

MOBILE BANKING

YES YES YES YES YES YES

TRADING A/C

FREE CHARGED

CHARGED

CHARGED

CHARGED

CHARGED

DEMAT A/C FREE CHARGED

CHARGED

CHARGED

CHARGED

CHARGED

MUTUAL FUND

An Introduction:A mutual fund is a common pool of money in to which investors with common investment objective place their contributions that are to be invested in accordance with the stated investment objective of the scheme.

The investment manager would invest the money collected from the investor in to assets that are defined/ permitted by the stated objective of the scheme.

       A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:   

ORGANISATION OF A MUTUAL FUND

There  are  many  entities  involved  and  the  diagram  below  illustrates  the  organizational set up of a mutual fund.

Concept of Mutual Fund      

A Mutual Fund is a trust that pools the savings of a number of investors who

share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:   

Advantages of Mutual Funds:

• Professional Management - The primary advantage of funds (at least theoretically) is the professional management of your money. Investors purchase funds because they do not have the time or the expertise to manage

their own portfolio. A mutual fund is a relatively inexpensive way for a small investor to get a full-time manager to make and monitor investments.

• Diversification - By owning shares in a mutual fund instead of owning individual stocks or bonds, your risk is spread out. The idea behind diversification is to invest in a large number of assets so that a loss in any particular investment is minimized by gains in others. In other words, the more stocks and bonds you own, the less any one of them can hurt you (think about Enron). Large mutual funds typically own hundreds of different stocks in many different industries. It wouldn't be possible for an investor to build this kind of a portfolio with a small amount of money.

• Economies of Scale - Because a mutual fund buys and sells large amounts of securities at a time, its transaction costs are lower than you as an individual would pay.

• Liquidity - Just like an individual stock, a mutual fund allows you to request that your shares be converted into cash at any time.

• Simplicity - Buying a mutual fund is easy! Pretty well any bank has its own line of mutual funds, and the minimum investment is small. Most companies also have automatic purchase plans whereby as little as $100 can be invested on a monthly basis.

• Return Potential :- Mutual fund house invest the amount which they collect from public with the help of professional fund manager who does it with lot of research and depth study of various stock so there is good chance of getting good return. • Transparency :- All mutual fund house keep publishing all required information about there scheme at news paper so that investor can know about the current status of the scheme.

• Flexibility :- Mutual fund provides flexibility to its investor to withdraw his money any time from the scheme in open ended equity scheme, and it also gives option to investor that if he want to switch to any other scheme of same fund he can do it easily

• Tax benefits :- Income from mutual fund is exempted from income tax. Dividend income received from equity fund is tax free in hand of investor, income from long term capital gain is also tax free.

• Well regulated :-Mutual fund work under the guideline provided by SEBI

Disadvantages of Mutual Funds

• Professional Management- Did you notice how we qualified the advantage of professional management with the word "theoretically"? Many investors debate over whether or not the so-called professionals are any better than you or I at picking stocks. Management is by no means infallible, and, even if the fund loses money, the manager still takes his/her cut. We'll talk about this in detail in a later section.

• Costs - Mutual funds don't exist solely to make your life easier--all funds are in it for a profit. The mutual fund industry is masterful at burying costs under layers of jargon.

• Dilution - It's possible to have too much diversification (this is explained in our article entitled "Are You Over-Diversified?"). Because funds have small holdings in so many different companies, high returns from a few investments often don't make much difference on the overall return.

• Taxes - When making decisions about your money, fund managers don't consider your personal tax situation. For example, when a fund manager sells a security, a capital-gain tax is triggered, which affects how profitable the individual is from the sale.

Types of Mutual Funds

Mutual Funds can be categorized as follows

Investment Objective Equity Oriented Debt Oriented Balanced Fund Money Market or Liquid Fund Gilt Fund Index Funds

Constitution Open Ended Schemes Close Ended Schemes

Equity Oriented Schemes

Commonly called Growth Schemes,

Seek to invest a majority of their funds in equities and a small portion in money market instruments and have the potential to deliver superior returns over the long term.

They are exposed to fluctuations in value especially in the short term.

Hence not suitable for investors seeking regular income or needing to use their investments in the short-term. Ideal for investors who have a long-term investment horizon

Sector Specific

These schemes restrict their investing to one or more pre-defined sectors, e.g. technology sector.

Depend upon the performance of select sectors only, these schemes are inherently more risky than general-purpose schemes.

They are suited for informed investors who wish to take a view and risk on the concerned sector

Special Schemes

Index schemes The primary purpose of an Index is to serve as a measure of the performance of the market as a whole, or a specific sector of the market.

Saving schemes

Investors (individuals and Hindu Undivided Families (“HUFs”)) are being encouraged to invest in equity markets through Equity Linked Savings Scheme (“ELSS”) by offering them a tax rebate.

Real Estate Funds

Specialized real estate funds would invest in real estates directly, or may fund real estate developers or lend to them directly or buy shares of housing finance companies or may even buy their securitized assets.

Debt Based Schemes

These schemes, also commonly called Income Schemes, invest in debt securities such as corporate bonds, debentures and government securities.

The prices of these schemes tend to be more stable compared with equity schemes and most of the returns to the investors are generated through dividends or steady capital appreciation.

These schemes are ideal for conservative investors or those not in a position to take higher equity risks, such as retired individuals.

Income Schemes

These schemes invest in money markets, bonds and debentures of corporate with medium and long-term maturities.

These schemes primarily target current income instead of capital appreciation. They therefore distribute a substantial part of their distributable surplus to the investor by way of dividend distribution.

Such schemes usually declare quarterly dividends and are suitable for conservative investors who have medium to long term investment horizon and are looking for regular income through dividend or steady capital appreciation.

Money Market Schemes

Invest in short term instruments such as commercial paper (“CP”), certificates of deposit (“CD”), treasury bills (“T-Bill”) and overnight money (“Call”).

Least volatile of all the types of schemes because of their investments in money market instrument with short-term maturities.

Are popular with institutional investors and high net worth individuals having short-term surplus funds.

Gilt Funds

This scheme primarily invests in Government Debt. Hence the investor usually does not have to worry about credit risk since Government Debt is generally credit risk free.

Hybrid Schemes

These schemes are commonly known as balanced schemes. These schemes invest in both equities as well as debt.

By investing in a mix of this nature, balanced schemes seek to attain the objective of income and moderate capital appreciation and are ideal for investors with a conservative, long-term orientation.

Index Funds

Replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc

Invest in the securities in the same weight age comprising of an index.

NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms.

Exchange traded index funds launched by the mutual funds which are traded on the stock exchanges

Balanced Fund

Aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities

Appropriate for investors looking for moderate growth.

They generally invest 40-60% in equity and debt instruments.

NAVs of such funds are likely to be less volatile compared to pure equity funds

Constitution

Schemes can be classified as Closed-ended or Open-ended depending upon whether they give the investor the option to redeem at any time (open-ended) or whether the investor has to wait till maturity of the scheme.

MUTUAL FUND INDUSTRY IN INDIA

The mutual fund industry in India started in 1963 with the formation ofUnit Trust of India, at the initiative of the Government of India andReserve Bank . The history of mutual funds in India can be broadlyDivided into four distinct phases

First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament.It was set up by the Reserve Bank of India and functioned under theRegulatory and administrative control of the Reserve Bank of India. In1978 UTI was de-linked from the RBI and the Industrial Development Bank ofIndia (IDBI) took over the regulatory and administrative control in placeof RBI. The first scheme launched by UTI was Unit Scheme 1964. At the endof 1988 UTI had Rs.6,700 crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up bypublic sector banks and Life Insurance Corporation of India (LIC) andGeneral Insurance Corporation of India (GIC). SBI Mutual Fund was the

First non- UTI Mutual Fund established in June 1987 followed by CanbankMutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), IndianBank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda MutualFund (Oct 92). LIC established its mutual fund in June 1989 while GIC hadset up its mutual fund in December 1990.At the end of 1993, the mutual fund industry had assets under managementof Rs.47,004 crores.

Third Phase – 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in theIndian mutual fund industry, giving the Indian investors a wider choice offund families. Also, 1993 was the year in which the first Mutual FundRegulations came into being, under which all mutual funds, except UTI wereto be registered and governed. The erstwhile Kothari Pioneer (now mergedwith Franklin Templeton) was the first private sector mutual fundregistered in July 1993.The 1993 SEBI (Mutual Fund) Regulations were substituted by a morecomprehensive and revised Mutual Fund Regulations in 1996. The industrynow functions under the SEBI (Mutual Fund) Regulations 1996.The number of mutual fund houses went on increasing, with many foreignmutual funds setting up funds in India and also the industry has witnessedseveral mergers and acquisitions. As at the end of January 2003, therewere 33 mutual funds with total assets of Rs. 1,21,805 crores. The UnitTrust of India with Rs.44,541 crores of assets under management was wayahead of other mutual funds.

Fourth Phase – since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963UTI was bifurcated into two separate entities. One is the SpecifiedUndertaking of the Unit Trust of India with assets under management ofRs.29,835 crores as at the end of January 2003, representing broadly, theassets of US 64 scheme, assured return and certain other schemes. TheSpecified Undertaking of Unit Trust of India, functioning under anadministrator and under the rules framed by Government of India and doesnot come under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC.It is registered with SEBI and functions under the Mutual FundRegulations.

MUTUAL FUND INDUSTRY IN JAIPUR

Looking at the current scenario it can be said that mutual fund industry in Jaipur is in booming stage. The corpus size is 15 cr per month & is growing at the rate of 100 percent which is simply remarkable.The prominent segment in the industry are jewellery, carpet, handicrafts, garments, small scale industries etc.Carpet & garment manufcturing are the most potential segment in the industry they alone comprises of 40% of the total market.These exporters are always in the need of investment avenueswhere there funds don’t get blocked and generate returns as per to the requirements considering these circumstances it can be said mutual fund is the best option available to them and many exporters are coming forward to avail this lucrative opportunity.

PRODUCT RANGE

EQUITY PRODUCTS BALANCE PRODUCTS

DEBT PRODUCTS

Kotak Mid-cap Kotak Balance Kotak BondKotak MNC Kotak Flexi Debt

Kotak GuiltKotak Income PlusKotak Liquid

A Brief Introduction of Various Mutual Fund Scheme

Kotak Bond

Kotak Bond is a pure debt scheme, with a diversified portfolio, comprising of government, PSU and corporate bonds. Kotak Bond aims to reduce risk by investing in instruments with a credit rating of AA- or higher. The scheme offers dividends* 4 times a year. Kotak Bond is available with three investment plans.

Kotak Flexi Debt

To maximise returns through an active management of a portfolio of debt and money market securities.0% to 95% in debt instruments with maturity more than 1 year. 5% to 100% in debt and money market instruments with maturity less than 1 year.

Kotak Gilt

Kotak Gilt is a scheme that allows the retail investor to invest in the otherwise wholesale government securities market. Kotak Gilt invests in the gilt-edged government securities giving you a zero credit risk investment option. It recognizes that for you, safety is prime, giving you the liquidity of a savings account with attractive returns.

Kotak Income plus

To enhance returns over a portfolio of debt instruments with a moderate exposure in equity and equity related instruments.

Kotak Liquid

A money market scheme that seeks to provide reasonable returns with a high level of liquidity through investments in Money market instruments, corporate and government debt securities as well as repos in permitted securities of different maturities. There shall be two options under the Scheme. They are :A. Growth Option: Under this option, there will be no distribution of income and the return to investors will be only by way of capital gains, if any, through redemption at Applicable NAV of Units held by them.B. Dividend Re-investment Option: The Trustee may decide to distribute by way of dividend if distributable surplus is available and adequate for

distribution in the opinion of the Trustee. The Trustee's decision with regard to such availability and adequacy of surplus, rate, timing and frequency of distribution shall be final. The Dividend will be declared once a week and the record date shall be every Monday.

Kotak Balance

Kotak Balance seeks to exploit the capital appreciation of equity and the stable returns of debt. By investing a substantial amount in debt and money market instruments, the scheme aims to minimize the risk that arises out of even the most carefully picked equity stocks.The scheme usually has an exposure of about 50% to 60% on equity and the rest in debt instruments.

Kotak Mid-Cap

Kotak Mid-Cap will try to identify and invest in mid-cap companies that will become tomorrow’s large-caps. On their way to becoming large corporates, companies pass through a life cycle. When they reach the mid-cap stage, companies have survived the highest-risk part of their life cycle (the small-cap stage) and are entering a period of long-term growth.

Kotak MNC

Kotak MNC is a equity growth scheme that seeks to offer growth through investments in reputed multinational companies operating in India or companies where MNCs have a substantial stake.The investment focus is on companies that have good governance, strong brands, market leadership and strong parentage.The scheme is suitable for investors with a time horizon of 3 to 5 years.

Mutual Fund Analysis During my study I found out some basic rules for investing in mutual funds

1. Assess yourself: self assessment of one’s need; expectation and risk profile is of prime importance failing which, one will commit more mistakes in putting money in right place. One should identify the degree of risk bearing capacity the one has .

2. Try to understand where money is going: It is important to identify the nature of investment and to know if one is comfortable with the investment.

3. Don’t rush on picking funds, think first: it is important to know therisk associated with the funds and align with the quantum to know the risk the one is willing to take.

4. Invest don’t Speculate5. Don’t put all the eggs in one bucket: One should invest in different assewt

classes and is generally the best option as it averages the risk in each category

6. Be Regular: Investing should be a habit not an exercise undertaken at ones wish

7. Do your homework: It is important for all investers to research the avenue available to them in irrespective of the investers category the belong to,this is important bcz an informed invester is in better position to take decision

8. Find the right funds:Finding funds that do not have much fees is of atmost importance as the fee charged ultimately goes from the pocket of investor.

9. Keep the proper track of your investment.10. Know when to sell your mutual fund: knowing when to exit a fund to is of

utmost importance. One should book profits immediately when enough has been earned.

Insurance - An Overview

With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It’s a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the

country’s GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. Yet, nearly 80 per cent of Indian population are without life insurance cover, health insurance and non-life insurance continue to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This itself is an indicator that growth potential for the insurance sector is immense. A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and at the same time strengthens the risk taking ability. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country. With a large capital outlay and long gestation periods, infrastructure projects are fraught with a multitude of risks throughout the development, construction and operation stages. These include risks associated with project implementaion, including geological risks, maintenance, commercial and political risks. Without covering these risks the financial institutions are not willing to commit funds to the sector, especially because the financing of most private projects is on a limited or non- recourse basis.Insurance companies not only provide risk cover to infrastructure projects, they also contribute long-term funds. In fact, insurance companies are an ideal source of long term debt and equity for infrastructure projects. With long term liability, they get a good asset- liability match by investing their funds in such projects.IRDA regulations require insurance companies to invest not less than 15 percent of their funds in infrastructure and social sectors. International Insurance companies also invest their funds in such projects.Insurance is a federal subject in India. There are two legislations that govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999.

HISTORY

The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non-Indian lives as Indian lives were considered more riskier for coverage.

The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. The first general insurance company- Tital Insurance Company Limited, was established in 1850. Till the end of nineteenth century insurance business was almost entirely in the hands of overseas companies. Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the provident fund Act of 1912. Several frauds during 20's and 30's sullied insurance business in India. By 1938 there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over insurance business. The insurance business grew at a faster pace after independence. Indian companies strengthened their hold on this business but despite the growth that was witnessed, insurance remained an urban phenomenon. The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalised monopoly corporation and LIC was born. Nationalisation was justified on the grounds that it would create much needed funds for rapid industrialization. The (non-life) insurance business, however, continued to thrive with the private sector till 1972. Their operations were restricted to organised trade and industry in large cities. The general insurance industry was nationalised in 1972. With this, nearly 107 insurers were amalgamated and grouped into four companies- National Insurance Company, New India Assurance Company, Oriental Insurance Company and United India Insurance Company. These were subsidiaries of the General Insurance Company (GIC).The Government of India liberalised the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign partners in an insurance company.

Major players in insurance sector

In the life Insurance segment the Life Insurance Corporation of India (LIC) is the major player. The LIC has 2050 branches. It is constituted in to seven Zones. Currently, there are 5,60,00 LIC agents in India.

The Life Insurance Corporation has been witnessing a major fall in its market share. It has fallen to 80.4 percent in October from 81.1 percent a month ago. And private insurers are known to have grabbed around 20 percent of the life insurance pie. While the reasons are many, withdrawal of certain incentives of development officers is said to be one of the reasons for the poor performance. LIC still holds 90.9 percent of the market as regards policies and its premium income from new policies was over Rs 9952 crore till October.

After liberlisation of insurance sector in 2000-01, many private players entered into the market &the major companies are as follows :

1. HDFC Standard Life Insurance Company Ltd.2. Max New York Life Insurance Company Ltd.3. ICICI Prudential Life Insurance Company Ltd.4. Kotak Mahindra Old Mutual Life Insurance Company Ltd.5. Birla Sun Life Insurance Company Ltd.6. Tata AIG Life Insurance Company Ltd.7. SBI Life Insurance Company Ltd.8. ING Vysya Life Insurance Company Private Ltd.9. Bajaj Allianz Life Insurance Company Ltd.10.Aviva Life Insurance Co. India Pvt. Ltd.

Among private life insurance companies, ICICI Prudential tops the charts with a market share of 5.7 percent followed by Birla Sun Life - 2.9 percent, Bajaj Allianz –2.4 percent, SBI Life – 2.2 percent ,Kotak Mahindra –1.08 percent.

MAJOR PLAYERS IN INSURANCE SECTOR

1 LIC 80.40%

2 ICICI Prudential 5.70%

3 Birla Sun Life 2.90%

4 Bajaj Allianj 2.40%

5 SBI Life 2.20%

6 Kotak Life Insuarance 1.10%

7 Others 5.30%

INVESTMENT PLANS

1. Kotak Safe Investment Plan I2. Kotak Safe Investment Plan II3. Kotak Flexi Investment Plan4. Kotak Retirement Plan (Unit Link)

Kotak Safe Investment Plan I

Kotak Safe Investment Plan is an investment cum insurance plan, where we invest your money in capital markets and you get market-linked returns. All gains from the markets are yours to take and in case the markets do not perform well, you would still get back the guaranteed Sum Assured. Sounds interesting. Read on.

"What is Kotak Safe Investment Plan?"This plan is an opportunity to invest in the capital markets and make market linked returns. The plan assures you of a minimum guaranteed amount in case of death or on maturity. Thus, while it invests your money in capital markets, and gives you an opportunity to make high returns, it protects your downside. What’s more, these returns are tax-free to you.Money Market Fund - The portfolio will consist of money market investments such as treasury bills, commercial paper, certificates of deposit, short-term deposits, bills of exchange, debentures, bonds and Government securities etc.

You have the flexibility to choose from four well-managed investment funds namely Money Market/ Gilt/ Balanced/ Growth, based on your appetite for risk and commensurate returns. At any point in time, you have complete flexibility to switch your moneys (or a part of it) from one fund to the other. The switching

You may switch your funds any number of times during the term of the plan, at daily declared selling and buying prices NAVs (Net Asset Value).

You can monitor the daily performance of the fund on our website

www.kotaklifeinsurance.com. In case you miss your premium payments after the first 3 years, the

Automatic Cover Maintenance facility would ensure that the policy remain in force. The units, from your holdings, would be sold at the prevailing selling price to meet the risk and expense charges, so that your policy continues to remain in force. As long as the value of units is sufficient

to meet the expenses, the policy would be in force. On maturity, the residual value of units would be paid as a benefit to the policyholder.

Loan facility available after the policy has been in force for 3 years. 15 day free-look period.

"How does this plan work?"The premiums paid by you will be invested in the fund of your choice after deducting certain administration and other expenses. (Please refer to the section on charges). Entry into a plan would be based on the buying price as on that date.During the term of the plan, your financial requirements could change. And you may want switch between funds. Your units in the fund would be sold at the selling price and other units bought at the buying price as per your instructions.

Permanent Disability Benefit: This benefit can be added to the basic life insurance plan to provide financial support in case of permanent disability due to an accident. The amount payable under this benefit would be paid out as an annuity. The maximum Permanent Disability Benefit that you can avail of is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs)."What are the charges applicable?"

Sales related and other expenses in the first year would be 14%. In subsequent years, the expenses would be 3.5%.

Underwriting charges as applicable. Mortality charges and administration charges as applicable. Annual Fund Management charges as follows:

Money market - 0.6%, Gilt Fund - 1.0%, Balanced Fund - 1.3%, Growth fund - 1.5%

(To know more on charges, please refer to the sheet "Details on Charges").

"An Illustration"Jay Sharma, who is 30 years old, wants a product that gives him market linked returns as well as a life cover. He, therefore, decides to buy the Kotak Safe Investment Plan for a period of 10 years. He wants to invest Rs.50,000 per year in the plan. He chooses to put all his money in the Growth funds.Based on this amount of investment*, Jay’s sum assured works out to be Rs.532,000.

* Actual premium amount is Rs.50,032 p.a.

THE KOTAK SAFE INVESTMENT PLAN-II:

Kotak Safe Investment Plan is an investment cum insurance plan, where Kotak invest customers’ money in capital markets and they get market-linked returns. All gains from the markets are their to take and in case the markets do not perform well, they would still get back the guaranteed Sum Assured. Sounds interesting. Read on.

"What is Kotak Safe Investment Plan?"This plan is an opportunity to invest in the capital markets and make market linked returns. The plan assures customers of a minimum guaranteed amount in case of death or on maturity. Thus, while it invests their money in capital markets, and gives them an opportunity to make high returns, it protects their downside. Money Market Fund - The portfolio will consist of money market investments such as treasury bills, commercial paper, certificates of deposit, short-term deposits, bills of exchange, debentures, bonds and Government securities etc. Minimum Maximum Short term Investments such as money market instruments, short term bank deposits, call money and cash 100% 100% Gilt Fund - The portfolio will primarily consist of Government securities and infrastructure debt assets as defined in the IRDA regulations as per the following indicative investment pattern. Minimum Maximum Investment in Government / Government guaranteed securities 80% 100% Short term Investments such as money market instruments, short term bank deposits, call money and cash 0% 20%

Balanced Fund - The portfolio will include primarily listed Indian equity shares, debt instruments including corporate debt, Government securities and short-term investments. Minimum Maximum Investment in listed equity shares 30% 60% Investment in Government / Government guaranteed securities and other debt securities and infrastructure assets 20% 70% Short term Investments such as money market instruments, short term bank deposits, call money and

cash 0% 20% Growth Fund - The portfolio will consist of a professionally managed portfolio primarily invested in listed equity and equity-related investments. Security will be enhanced through holdings in Government and other debt securities, infrastructure assets as defined in the IRDA regulations together with short-term investments. Minimum Maximum Investment in equity shares / equity related instruments 40% 80% Investment in Government / Government guaranteed securities and other debt securities and infrastructure assets 20% 60% Short term Investments such as money market instruments, short term bank deposits, call money and cash 0% 20% Allocation of premiums to MM fund and other funds would be as per IRDA regulations

"Who can avail of the plan?” How old do you have to be to avail of this plan?Minimum age - 18 years Maximum age - 65 yearsFor what term can you avail of this plan?10 yrs - 30 yrsAt what intervals can I pay the premium?Quarterly Half- yearly Yearly"What are advantages offered by Kotak Safe Investment Plan?"

Customers have the flexibility to choose from four well-managed investment funds namely Money Market/ Gilt/ Balanced/ Growth, based on their appetite for risk and commensurate returns.

At any point in time, they have complete flexibility to switch their moneys (or a part of it) from one fund to the other. The switching between funds is a simple process of filling in a “Switch Form” and sending it to Kotak sales office.

Customers may switch their funds any number of times during the term of the plan, at daily declared selling and buying prices NAVs (Net Asset Value).

Customers can monitor the daily performance of the fund on Kotak’s website www.kotaklifeinsurance.com.

In case customers miss their premium payments after the first 3 years, the Automatic Cover Maintenance facility would ensure that the policy remain

in force. The units, from their holdings, would be sold at the prevailing selling price to meet the risk and expense charges, so that their policy continues to remain in force. As long as the value of units is sufficient to meet the expenses, the policy would be in force. On maturity, the residual value of units would be paid as a benefit to the policyholder.

Loan facility available after the policy has been in force for 3 years. 15 day free-look period.

"How does this plan work?"The premiums paid by customers will be invested in the fund of their choice after deducting certain administration and other expenses. Entry into a plan would be based on the buying price as on that date.Buying price is the price at which customers enter a fund, based on the market value per unit, increased by the relevant trading costs associated with buying the assets.During the term of the plan, their financial requirements could change. And they may want switch between funds. Their units in the fund would be sold at the selling price and other units bought athe buying price as per their instructions Selling price is the price at which they can sell units, based on the market value per unit, less the relevant trading costs associated with selling the assets.

"What do I receive on maturity of the plan?"On maturity, customers would receive either the Sum Assured or the market value of the units, whichever is higher. "What happens in the event of death of the life insured?"In the unfortunate event of death of the life insured, the beneficiary would receive either the Sum Assured or the market value of the units whichever is higher."What value-adds can customers opt for?"Customers may avail of the following value-adds for a nominal premium at the time of taking the plan. The aggregate premium on all value-adds should not exceed 30% of the basic Kotak Safe Investment Plan premium.

Term / Preferred Term Benefit: In the event of death during the term of this benefit, the beneficiary would receive an additional death benefit amount, which is over and above the sum assured. The maximum amount of benefit they can avail is equal to the basic sum assured. Where the Term Benefit cover applied for is more than Rs.10 lakhs, better rates may apply, subject to meeting eligibility requirements.Accidental Death Benefit: This benefit provides an additional amount (over and above the sum assured) to the beneficiary in the event accidental death of the life insured. The maximum cover available under this benefit is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs).Permanent Disability Benefit: This benefit can be added to the basic life insurance plan to provide financial support in case of permanent disability due to an accident. The amount payable under this benefit would be paid out as an annuity. The maximum Permanent Disability Benefit that they can avail of is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs).Permanent Disability is defined as permanent and immediate inability to work or permanent loss of use of two limbs or total and permanent loss of sight.

Kotak Flexi Plan

As you move through different stages in life, your financial priorities will change. When you are young, you may wish to invest more into investment products. As you grow older and as responsibilities increase, you may want to increase the amount that you set aside for insurance, to protect your family against uncertainties. We at Kotak Life Insurance understand the importance of flexibility in an insurance plan. Hence, we bring to you the Kotak Flexi Plan.

"What is the Kotak Flexi Plan?"

An investment cum insurance plan that can be customized to meet your constantly evolving needs. While on one hand it lets you decide the amount of insurance cover that you want, on the other hand, it invests a portion of the premium in the capital markets to ensure that your money works hard for you.

At the same time the plan ensures that you have enough flexibility to meet your financial objective of savings and protection, both through this single plan. The plan gives you the option to add lump sum injections, when you want. And what’s more it offers you the flexibility to withdraw your funds in part or in full.Maturity Benefit: You have the option to choose the sum assured that you would want on maturity. This sum assured would be referred to as the maturity sum assured or SA1. Portion of the premium corresponding to this amount would be referred to as the investment premium or P1. On maturity, you would receive either the SA1 (which is guaranteed), or the market value of units, whichever is higher.Death Benefit: The plans offer you the flexibility to decide the amount of insurance cover that you want. The amount of insurance cover selected would be referred to as the insurance sum assured or SA2. Portion of the premium corresponding to SA2 would be referred to as the insurance premium or P2. In the unfortunate event of death of the life insured, the beneficiary would receive SA2 plus the market value of the units, less unpaid P2 premiums.

Flexibility in SA2: During the term of the plan, your need for life insurance cover may change. You may need increased protection when you take up additional liabilities or when your financial responsibilities change. For e.g.:

Avail of a home loan / personal loan Get married Birth of your child or child’s education

Alternatively, on occasions such as closure of loans, children becoming independent and so on, your liabilities will decrease.Lump Sum Injection: There are times when you have excess surplus funds. You may want to invest this amount into the capital market and gain more. The plan allows you to make lump sum injection into the Supplementary Account, without affecting the sum assured. Supplementary Account is a separate account that will be set for lump sums that you inject from time to time.

Part Withdrawal: The plan gives you option to withdraw your funds in part, by liquidation of your units. The table given below illustrates the amount payable (net of charges) for every Rs.100 of part withdrawal.

Main Account* Supplementary AccountYear 1 Nil Nil

Year 2 & Year 3 50 100

Year 4 – Year 10 97.5 100

After year 10 100 100

*Main Account is the account in which units bought from P1 (net of charges) is held on your behalf, in the Fund specified by you.

When you request us for withdrawals, we would first liquidate units from your Supplementary Account. And only if need be, would your Main Account be liquidated. Part withdrawals from the Main Account will lead to a proportionate reduction in SA1.

Surrender: Plan will acquire a surrender value at the end of year 1. Table below outlines the surrender values payable, as a percentage of the value of units.

Main Account Supplementary AccountYear 1 Nil Nil

Year 2 & Year 3 50% 100%

Year 4 – Year 10 97.5 100%

After year 10 100% 100%

Paid Up Option: In case you do not wish to pay any further premiums, you can make the policy paid up. When the policy is in paid up mode, the amount paid out on death or maturity will be the market value of units. Units from your fund would be liquidated to recover the administration charge.

Under the non-forfeiture option, if the value of units falls below Rs 10,000/- the policy shall be foreclosed and the surrender value shall be paid.

Revival Option: In case your policy lapses, you can revive the benefits by making an application within a period of five years.

Investment Options: You have a choice of 6 funds. Investment Premium or P1 (net of charges) would be invested in any or a combination of the funds, specified by you.

Money Market Fund - The fund seeks to provide reasonable returns commensurate with low risk through investments in money market instruments such as treasury bills, commercial paper, call money market, etc.

Floating Rate Fund – The fund seeks to deliver returns in line with the market interest rate, from a portfolio invested primarily in floating rate debt instruments.

Gilt Fund - The fund seeks to generate returns through investments primarily in government securities. The fund gives you an option to invest in zero credit risk Central Government securities, as it recognizes that safety for you is prime.

Bond Fund - The fund seeks to generate returns from a portfolio constituted primarily of high-quality debt paper issued by corporates in India.

Balanced Fund - The fund seeks to achieve steady income and capital appreciation from a portfolio constituted of high quality debt securities and listed equity.

Growth Fund - The fund seeks to achieve capital appreciation through investments in listed equity and equity-related investments. Security will be enhanced through holdings in highly rated debt securities.

MoneyMarket

FloatingRate

Gilt Bond Balanced Growth

Money Market / Cash 100% 0% - 20%

0% - 20%

0% - 20%

0% - 20%

0% - 20%

Floating Rate Debt - 25% - - - - -

100%

Government Securities - 0% - 75%

80% -100%

0% - 75%

20% - 70% 20% -

60%Corporate Debt - - - 25% -

100% -

Equity shares - - - - 30% - 60% -

Equity & Related Instruments - - - - - 40% - 80%

* Percent refers to minimum and maximum limits within which investments can be made in respective instruments. Allocation of money to Money Market Fund and other funds would be as per IRDA guidelines / directions. Money can be parked in the Money Market Fund only in the last policy year."What value-adds can you opt for?" You may avail of the following value-adds for a nominal premium at the time of taking the plan.

Accidental Death Benefit: It provides an additional amount (over and above the death benefit) to the beneficiary in the event accidental death of the life insured.

Permanent Disability Benefit: This benefit is designed to provide financial support in case of permanent disability due to an accident.

Accidental Disability Guardian Benefit: In case the policyholder is permanently disabled as a result of accident, this benefit keeps the policy alive by waiving all future premiums on the policy."What are the tax benefits?" Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. These benefits are as per the currently prevailing tax regulations and you are advised to consult your tax advisor for details.

*Please consult your tax advisor for details. Advantages of the Plan:

Flexibility to choose your investment and insurance amounts.

Guaranteed maturity sum assured, SA1, to protect your money from a downside, even when you take an equity exposure.

Option to choose from six well-managed investment funds, of varying risk-return profile. And the flexibility to switch between funds, without attracting any tax liability.

Limited Premium Payment option to help you pay off your premiums over a short period of 3,5,7,10 or 15 years.

Opportunity to make lump sum injections, so that your surplus funds do not lie idle in a savings account.

In case of a financial emergency, you have the following options:Make partial or full withdrawals of fundsMake policy paid upAvail of automatic cover maintenance facility Loan facility available.

Eligibility

Entry Age Min- 14 yearsMax- 65 years

Term of the Plan Min -10 yearsMax – 30 years

Lump Sum Injection Amount Min – Rs.10,000Thereafter in multiples of Rs.10,000

Part Withdrawals AmountMin – Rs.10,000Max –Subject to leaving behind a balance of Rs.10,000 in the Main Account

SA2 Min - Rs.5,0000

P1 (including policy fees)

Mode Amount

Quarterly Rs.2,620Half Yearly Rs.5,115Yearly Rs.10,000

Please note:• In case of limited premium payment option, the minimum P1 is Rs.50, 000 • In case of life assured being a minor or in case where the life assured is 61

years of age or older (at the time of entry into the plan), SA2 would be restricted to Rs.50000. • For all policies with SA2 higher than Rs.50000, when the life assured completes 70 years of age, SA2 would automatically reduce to Rs.50000. • The total premium payable is P1 plus P2 plus a fixed policy cost of Rs.100.

Charges Sales related and other charges in the first year and subsequent would be as per the table below.

Charges are expressed as a percent age of P1.

Premium Paying Term Year 1 Year 2 Onwards

3 years 28% 4.375%

5,7 years 42% 4.375%

10 to 14 years 56% 4.375%

15 years and more 65% 4.375%

One time SA1 related charge – 0.02% of SA1 In the first year, the administration charge would be 7% of the annual

premium, for annual premium upto Rs.20,000. For portion of premium over Rs.20,000, the charge would be 3% of that part of the annual premium exceeding Rs 20,000. It is to be noted that in the first year, the maximum administration charge would be limited to a maximum of Rs.30,000.In subsequent years, the administration charge would be 4% of the annual premium, for annual premium upto Rs.20,000. For portion of premium over Rs.20,000, the charge would be 2% of that part of the annual premium exceeding Rs 20,000.

Annual Fund Management charges as follows: Money market - 0.6%, Gilt Fund - 1.0%, Floating Rate Fund – 1.2%, Bond Fund – 1.2%, Balanced Fund - 1.3%, Growth fund - 1.5% These are deducted from the unit price on daily basis

Buy-sell spread currently applicable are: Money market - .01%, Gilt Fund - 0.10%, Floating Rate Fund – 0.22%, Bond Fund – 0.22%, Balanced Fund - 0.50%, Growth fund – 0.58%. It should be noted that the spread would remain in the fund.

Lump sum injections would have an entry load of 2.5% of the Lump sum injection

Please note:• The Annual Fund Management charges would not increase beyond 40% of the initial level. • The buy-sell spread would not exceed beyond1%. • The renewal administration charges may be increased by a maximum of 40% in first 10 years or maximum 100% increase after 10 years. • Surrender charge on the Supplementary Account would not exceed 5%

Revision of Charges:

The company reserves the right to revise the charges including the right to change the manner in which the charges are recovered. The company also reserves the right to introduce new charges. Any revision or introduction of charges will be with prospective effect, with prior approval of IRDA, and only after giving notice to policyholder.

Investment Risk: The investments in the Units are subject to market and other risks and

there can be no assurance that the objectives of any of the plans will be achieved.

The Unit Value of the units of each of the funds can go up or down depending on the factors and forces affecting the financial and debt markets from time-to-time and may also be affected by changes in the general level of interest rates.

The past performance of other plans of the Company is not necessarily indicative of the future performance of any of these funds.

All benefits payable under the Policy are subject to the tax laws and other financial enactments, as they exist form time to time.

"Prohibition of Rebates" Section 41 of the Insurance Act, 1938 states:(1) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer.

(2) Any person making default in complying with the provision of this section shall be punishable with fine, which may extend to five hundred rupees.

Kotak Retirement Income Plan (Unit Link)

Retirement can be more relaxing when you don't have to worry about your finances. Especially when you have secured your and your family's future with the Kotak Retirement Income Plan. As an investment that is so rewarding, it assures that even though you have stopped working, your income continues. And you can continue living the life you love."What is the Kotak Retirement Income Plan (Unit linked)" The Kotak Retirement Income Plan is a savings plan designed to build a corpus for your future. It is a unit-linked plan where your money is invested in the funds of your choice to generate superior returns. Your sum assured is guaranteed* and you can enjoy the benefits of investing in the capital markets without worrying.

You may opt for any of the following versions: With Cover Without Cover Single Premium

"Who can avail of this plan?"Minimum Maximum

Term 10 (Single Premium – 5) 30

Entry Age 18 55 (Single Premium – 60)

Vesting Age 45 75

Lumpsum injection Rs, 10,000 per payment -

Premium payment (including policy fees)

Quarterly Rs.2,620Half Yearly Rs.5,115Yearly Rs.10,000Single Premium Rs.50,000

"What are the advantages of the Kotak Retirement Income Plan (Unit linked)?"

Benefits payable on retirement* You can take a cash lumpsum of upto a third of the total amount of

(a+b) : a) Basic sum assured or Main Account, whichever is higher; andb) The value of units in Supplementary Account.

The balance, i.e. two thirds will be used to buy an annuity of your choice from Kotak Life Insurance or any other insurer available then

Benefits payable on death

With CoverIn case of death during the term of the plan, your beneficiary may opt for a lumpsum or purchase an annuity with the total of :

The entire value of units or basic sum assured, whichever is higher; and The value of units in Supplementary Account.

Without Cover The value of units in the Main Account And the value of units in the Supplementary Account

Single Premium The entire value of units in the Main Account or basic sum assured of

102% of the single premium, whichever is higher And the value of units in the Supplementary Account

Fund Management You have a choice of four professionally managed funds to invest

your money in - Gilt fund, Bond Fund, Floating Rate Fund and Balanced fund. You may transfer your funds to the Money Market Fund during the last year of your policy term.

Depending on your risk appetite, you may switch your funds during the term of the plan at daily declared selling and buying prices, which are available on our website.

Retirement Age You have an option to retire between the age of 45 and 75 years. You can choose to retire early at any age on the grounds of ill-health

and withdraw the entire value of your units. You would also be able to opt for early retirement (other than ill-health) after the first policy year or on attainment of age 45, whichever is later. You will be given the value of your units less surrender charge, if applicable.

"What are the Tax Benefits on this plan ?"Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. These benefits are as per the currently prevailing tax regulations and you are advised to consult your tax advisor for details."How does this plan apply in real life?"Mr Kunal Sharma, a 35 year old, decides to opt for this plan to provide for his future and would like to begin vesting from the age of 60. Given below is the table which indicates the policy fund values at different premium amount options.

With Cover

Premium^Guaranteed Benefit - Sum Assured

Policy fund on retirement

6% 10%

10,000 2,90,000 3,95,200 7,20,300

15,000 4,35,000 5,92,900 10,80,500

20,000 5,80,000 7,90,500 14,40,700

Without Cover

Premium^ Guaranteed Benefit - Sum Assured Policy fund on retirement

6% 10%

10,000 3,10,000 4,17,600 7,56,300

15,000 4,65,000 6,26,500 11,34,500

20,000 6,20,000 8,35,300 15,12,700

If Mr Sharma decides to purchase a With Cover plan paying a premium of Rs 20,000 per annum, he is expected to receive an amount of Rs 14,40,700 on his retirement assuming a 10% rate of return or Rs 7,90,500 at a return of 6%. In case of poor market performance, he will still receive a guaranteed sum assured of Rs 5,80,000 ensuring that his hard earned money is not eroded.

^Premium amount has been rounded off to the nearest 1000.Assuming that 100% of the funds are invested in the Balanced Fund.

In the illustration, some benefits are guaranteed and some are variable. Guaranteed Returns are marked "guaranteed" in the illustration. Variable returns are shown at two different rates of assumed future returns. These assumed rates of return are not guaranteed and they are not the upper or lower limits of what you might get back .The actual return may be different depending on a number of factors including future investment performance.

"What are the charges applicable?"Mr Kunal Sharma, a 35 year old, decides to opt for this plan to provide for his future and would like to begin vesting from the age of 60. Given below is the table which indicates the policy fund values at different premium amount options.

Premium Allocation Rate Year 1 Year 2 onwards

Regular Premium 86.875% 97.20%

Single Premium 97.50% -

Administration ChargesIn the first year, the administration charges would be 13% for annual

premium upto Rs.20,000. For the portion of premium in excess of Rs 20,000/- , the charges would be 3% of the annual premium amount.In subsequent years, the administration charges would be 8% for annual premium upto Rs.20,000. For the portion of premium in excess of Rs 20,000/- , the charges would be 2% of the annual premium amount.For the Single Premium plan, policy administration charges of Rs 32 / month would be levied.

Annual Fund Management charges Gilt Fund - 1.0%, Bond Fund – 1.2 %, Floating Rate Fund – 1.2%, Balanced Fund - 1.3%, Money Market Fund – 0.6%. These are deducted in the unit price on daily basis.Buy Sell spreadThe spreads currently applicable are: Gilt Fund – 0.10%, Bond Fund – 0.22 %, Floating Rate Fund – 0.22%, Balanced Fund - 0.50%, Money Market Fund – 0.01%. The spread is applied on the Net Asset Value of the units

Sum assured related charges These charges are deducted monthly only in the first year by liquidating units of the funds that you have invested in, and are based on the age of the life to be insured.

For the without cover plan, the charges are 0.08% of the Sum Assured

For the with cover plan, they are calculated as follows:

Age of life insured (years)Percentage of Basic Sum Assured

18 to 35 0.2

36 to 45 0.3

46 to 59 0.4

60 above 0.6

Mortality charge (applicable for the with cover & single premium plan) The mortality charge is equal to the Basic Sum Assured less premiums due but not paid less the selling value of all the units held by you, multiplied by the mortality charge for your age.

COMPARATIVE ANALYSIS

Comparative analysis of investment plans offered by different companies.The comparison has been made according to certain parameters given below:

1.Eligibility2.Plan term3. Maturity benefits4. Tax rebate5. Flexibility6. Riders7. Capital guarantee8. Investment options9. Death benefits10. Injection /withdrawl amount

Kotak Flexi Plan

Eligibility:

Entry Age Min- 14 yearsMax- 65 years

Plan Term:

Term of the Plan Min -10 yearsMax – 30 years

Maturity Benefit: You have the option to choose the sum assured that you would want on maturity. This sum assured would be referred to as the maturity sum assured or SA1

Tax rebate: Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. These benefits are as per the currently prevailing tax regulations.

Flexibility : Depending on your appetite for risk or your expectations of returns, you could switch between these funds, any number of times, without any tax liability

Riders: Accidental Death benefit, Permanent disability benefit, critical Illness,Life guardian benefit.

Capital Guarantee : Kotak Mahindra Bank give capital gurantee for the amount invested

Investment Options: You have a choice of 6 funds. Investment Premium or P1 (net of charges) would be invested in any or a combination of the funds, specified by you.

Money Market Fund Floating Rate Fund Gilt Fund Bond Fund Balanced Fund Growth Fund

Death Benefit: The plans offer you the flexibility to decide the amount of insurance cover that you want. In the unfortunate event of death of the life insured, the beneficiary would receive plus the market value of the units,less unpaidpremiums.

Lump Sum Injection:

Lump Sum Injection Amount Min – Rs.10,000Thereafter in multiples of Rs.10,000

Part Withdrawals AmountMin – Rs.10,000Max –Subject to leaving behind a balance of Rs.10,000 in the Main Account

Tata AIG- Invest Assure

Eligibility & term

Term of policy Minimum age

Maximum age

15 years 30 days 60 years

20 years 30 days 55 years

30 years 30 days 45 years

Maturity Benefit: You have the option to choose the sum assured that you would want on maturity. This sum assured would be referred to as the maturity sum assuredTax-Benefit Premiums paid under this plan are eligible for tax benefits under Section 88 as per current Income Tax Act. Moreover, all the life insurance proceeds are generally tax-free as per Sec10 (10D) of Income Tax Act, 1961.Flexibility: Flexibility of choosing the term of cover i.e 15 yrs, 20 yrs,&30 yrs.Flexibility of choosing the amount of death coverRiders: Accidental Death benefit, Permanent disability benefit, critical Illness.Capital Gurantee: No capital gurantee is providedInvestment Options: You have a choice of 6 funds. Investment Premium or P1 (net of charges) would be invested in any or a combination of the funds, specified by you.

Money Market Fund Floating Rate Fund Gilt Fund Bond Fund Balanced Fund

Growth Fund Death Benefit: The plans offer you the flexibility to decide the amount of insurance cover that you want. In the unfortunate event of death of the life insured, the beneficiary would receive plus the market value of the units,less unpaidpremiums.

Lump Sum Injection:

Lump Sum Injection Amount Min – Rs.10,000Thereafter in multiples of Rs.10,000

Part Withdrawals AmountMin – Rs.10,000Max –Subject to leaving behind a balance of Rs.10,000 in the Main Account

SBI – LIFE

Eligibility and termTerm of policy Minimu

m ageMaximum age

5 years 18 years 60 years

10 years 18 years 60 years

Maturity Benefit: Guaranteed 5% annual additions(Simple) on Sum Assured with

benefit of Single Premium payment In the event of death, the Sum Assured as increased by the annual

addition on the date of death will become payable. Upon survival, the Sum Assured with total additions during the period will be payable.

Tax-Benefit: Premiums paid under this plan are eligible for tax benefits under Section 88 as per current Income Tax Act. Moreover, all the life insurance proceeds are generally tax-free as per Sec10 (10D) of Income Tax Act, 1961

Flexibility: Flexible in choosing the term cover.as compared to other plans its less flexible.Riders: Critical illness benefit

Capital Gurantee: Guaranteed 5% annual additions(Simple) on Sum Assured with benefit of Single Premium payment

Investment Options: No investment options are available.

Death Benefit: In the event of death, the Sum Assured as increased by the annual addition on the date of death will become payable. Upon survival, the Sum Assured with total additions during the period will be payable.CONCLUSIONS

Retail Banking Conclusion

There are many banks offering saving bank accounts out of which five main banks are chosen for this study namely, Kotak Mahindra Bank, ICICI bank, HSBC bank, Standard Charted bank and UTI bank.

Out of all the banks which were under the scope of the study Kotak Mahindra was seem to the best to offer saving bank accounts with the best of its terms and services.

Mutual Funds: Conclusion

A mutual fund brings together a group of people and invests their money in stocks, bonds, and other securities.

The advantages of mutual are professional management, diversification, and economies of scale, simplicity, and liquidity.

The disadvantages of mutual are high costs, over-diversification, possible tax consequences, and the inability of management to guarantee a superior return.

There are many, many types of mutual funds. You can classify funds based on asset class, investing strategy, region, etc.

Mutual funds have lots of costs.

Costs can be broken down into ongoing fees (represented by the expense ratio) and transaction fees (loads).

The biggest problems with mutual funds are their costs and fees.

Mutual funds are easy to buy and sell. You can either buy them directly from the fund company or through a third party.

Mutual fund ads can be very deceiving.

Insurance: Conclusion

After liberalization of insurance sector in 2000-01, many private players entered into the market. But still the major player in this sector is LIC with 80.40% of the market share and the premium collection stands to 90% of the total market.

Thus is it still very difficult for the new players entered into the market to convenience the investors and to gain confidence as LIC had done in the previous days.

Talking about Kotak Life Insurance, it has just 2% of the market share and has lots of potential to gain and to enlarge its investor base.

The only thing company has to do is to gain investor’s confidence and to provide as much security of their fund as they can.

References:

www.kotak.comwww.utisel.comwww.amfiindia.comwww.investopedia.comwww.valueresearch.comwww.indiainfoline.comwww.nseindia.comwww.moneycontrol.comwww.mutualfundindia.comwww.utimutualfund.comwww.icicidirect.comwww.sbimf.com

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Books:-Personal financial planning (SIMCS)Portfolio Management (SIMCS)